Thursday, March 24, 2016

Today, the Dutch central bank published its Annual Report. This coincided with the death of our most famous soccer player, Johan Cruyff, so it's clear that there is not so much undivided attention to their whole report.

Scanning through the report, I noticed an interesting paragraph in the sustainability-part of the report (p. 208), under the header of inclusion and accessibility of payments. It stated that DNB aims to develop a working prototype DNBcoin based on blockchain technology.

What is new however is the environment in which this development occurs. Previously, central banks were keen on getting rid of cash as an inefficient payment method. As this starts to be succesfull (in Sweden and the Netherlands for example) the central banks adapt their position. The policy line now is that for availability and financial inclusion reasons cash still needs to be around as a payment mechanism.

So when we now see central banks moving forward in the electronic cash domain (now conveniently labelled: blockchain/fintech, instead of bitcoin) it might be to no longer spin it off to the market, but to create a permanent digital replacement of cash.